Investors splash out on regional assets

Private investors have headed out of the city to the regions to snap up almost $110 million worth of assets, from Bunnings hardware stores to petrol stations and childcare centres, that offer better yields in the low-interest-rate environment.

Charter Hall’s unlisted Direct Industrial Fund No.4 (DIF4) led the charge, paying $65.3 million for Nowra’s Bunnings warehouse, with a net lease of 12 years and an initial passing yield of 4 per cent.

The fund’s manager, Julian Menegazzo, said the acquisition of Bunnings Nowra was in line with DIF4’s strategy to invest in ‘‘quality properties in premium locations with high capital growth potential and long-weighted average leases’’.

At the first of the Burgess Rawson auctions for the year in Sydney, deals worth $39.6 million were concluded on a blended yield of 5.68 per cent, equal to a clearance rate of 88.88 per cent.

Burgess Rawson partner in Sydney, Rhys Parker, said inquiries had come from 40 people in the room and more online, and the auction had ‘‘filtered down to an estimated registered buyer pool of $210 million’’.

The highest sales were The Alby hotel in Canberra for $8.3 million on a yield of 5.3 per cent, followed by the North Boambee Valley car yard for Audi, Land Rover and Skoda, which sold for $6.9 million on a yield of 5.17 per cent.

In Picton, south-west of Sydney, a childcare centre was snapped up for $3.29 million, while in Tweeds Head on the northern NSW coast a United Petroleum petrol station sold for $3.9 million on a yield of 5.38 per cent.

Burgess Rawson chief executive Ingrid Filmer said that over the past two years investors had embraced a new way of purchasing, and she was confident the trend was ‘‘here for the long term’’.

‘‘Transactions in 2021 have demonstrated ongoing investor confidence in high-quality, essential service assets,’’ she said.

‘‘Not only were investors comfortable bidding at auction via phone or online, but we also saw a high number of cross-border transactions and deals made sight unseen.

‘‘Community lockdowns and restrictions did not deter investors who could not physically inspect a property. Instead, reputable tenants, secure leases, and the ability to trade through was too compelling. The confidence in essential service assets will prevail.’’

Investors are tipped to be out in force for the Melbourne auction today where the main sale is a portfolio of three National Tiles showrooms, including the flagship site on Whitehorse Road, Mitcham.

The properties are offered in a sale-and-leaseback deal by founder Frank Walker. These are expected to sell for about $19 million combined.

There are also childcare centres in Sunbury, Seaford and Ormond and an IGA shopping centre at Fraser Rise in Melbourne’s northwest on offer.